The cryptocurrency market is an unpredictable one. It’s so volatile that the price of Bitcoin can change multiple times in just a couple of days. New traders will have to learn to navigate this market carefully if they want their money to grow and not disappear into thin air.
In this post, we’ll discuss the top three things you need to do as a new trader to avoid losing your money while trading cryptocurrencies.
Do Your Research Before Blindly Following the Experts?
In the world of cryptocurrency, it can be difficult to know who you can trust. There are a lot of experts that have been able to show their expertise in the past, and many that claim they will be able to help you with your investments. The problem is that there are so many different opinions on what coins should do well this year or how Bitcoin has already reached its all-time high.
It’s important for investors not to follow blindly but instead research before following any expert advice. By doing this, investors will avoid losing money through poor investment choices and become more knowledgeable about this space as a whole and understand why certain cryptocurrencies may seem like good ideas at first yet actually end up failing miserably.
Never Short-Sell
If you are a new investor in the cryptocurrency market, it is best to avoid shorting your coins. This will help you avoid missing out on potential gains and losing money altogether. Shorting cryptocurrency has been very popular recently as people try to make quick money with this volatile market.
Not Your Keys Not Your Coins
Cryptocurrencies are an asset, and it’s important to take care of them. If you store your cryptocurrencies on exchanges where they can be hacked, then you’ll lose all the money you have invested in crypto.
The best way to avoid this is by using a hardware wallet or paper wallet. Hardware wallets are more expensive, but they are safer than just storing your digital currency on an exchange that could get hacked at any time. There have been many reports of people losing their cryptocurrency because they stored it on an exchange that got hacked – don’t be one of those people.
Never Chase the Price
The cryptocurrency market is volatile, which means if you are buying into a coin, it’s important not to chase the price up because if you do, there is no guarantee that the price will still be high when you get ready to sell. Instead of chasing the price, establish an entry point for yourself and stick with it.
This way, if the price drops after your purchase or stays stagnant for weeks or months on end, you will have already planned out how long you want to hold onto your coins before selling them off to get back your initial investment and make some profit.
Avoid Low Liquidity Cryptos
Low Liquidity cryptocurrencies are the riskiest cryptocurrencies to invest in. These cryptos have a low daily trading volume and don’t get enough purchases or sales on exchanges, making them extremely volatile. It’s important not to get caught up in low liquidity cryptos because they can be a huge money pit for your investment account.
Avoiding these coins is easy once you know what signs to look out for when researching a coin before investing. The first sign that a cryptocurrency could be considered low liquidity is if it’s only available on one exchange or two smaller ones with very little volume compared to other popular exchanges like Binance and Coinbase Pro.
Final Word
Whether you’ve been trading for years or just want to get started with cryptocurrency investing, we hope this post has helped clarify some of the top tips and strategies that will help keep your money safe. If you are interested in trading Bitcoins, Visit eKrona for more information on bitcoin trading.
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